Answer: Please see explanation column for answer
Explanation:
TENT TYPE---STANDARD CAMPING TENT
Standard camping tent 21 yards $9.50 per yard
Actual qty purchased in yards = 5900
Actual qty used= 2670
Standard Price= $9.50
Standard quantity yards =290x21= 6090 yards
Actual price per yard= $22,420/5900=$3.8
TENT TYPE---DELUXE BACKPACKING TENT
Deluxe backpacking tent 16 yards $7.60 per yard
Actual qty purchased in yards =2900
Actual qty used= 1480
Standard quantity yards =370X 16= 5920 Yards
Actual price per yard= $14,500/ 2900= $5
Standard price= $7.60
A) To find Direct Material Price Variance
<u>For Standard Model</u>
Actual quantity purchased x Actual price=5900x3.8=$22,420
Actual quantity x Standard price=5900x9.50= $56,050
Direct Material Price Variance which is favourable is given by $56,050 - $22,420= $33, 630
For Deluxe
Actual quantity purchased x Actual price= 2900x 5.0= 14,500
Actual quantity x Standard price=2900x7.60=$22,040
Direct Material Price Variance which is favourable is given by = $22,040-14500=$7540
TOTAL DIRECT MATERIAL PURCHASE PRICE VARIANCE = $33,630-$7,540=$26,090
B) To find Direct Material Quantity Variance
<u>For Standard </u>
Actual quantity x standard price= 2,670x $9.50=$25,365
Standard quantity x Standard price=6090x9.50= $57, 855
Direct Material Quantity Variance which is Favorable is given by $57,855-$25,365= $32,490
<u>For Deluxe
</u>
Actual quantity x standard price= 1480 x $7.60=$11,248
Standard quantity x Standard price= 5920 x $7.60= $44,992
Direct Material Price Variance which is Favorable is given by $44,992 -$11,248= $33,744
TOTAL DIRECT MATERIAL QUANTITY VARIANCE = $33,744-$32,490 =$1254
Journal to record purchase of materials and incurred price variance
<u>March
</u>
Raw materials inventory ----Debit 78,090……….(5900x9.50 + 2900x7.60)
Direct Materials price variance-----Debit $26,090
Accounts Payable----------------Credit $36, 920……..($=$22,420+14,500 )
Journal to record use of direct materials and Incurred price variance
March
Work in progress inventory ----Debit 102,847 ……….(6090 x$9.5 + 5920 x 7.60)
Direct Materials quantity variance-----Debit $1254
Accounts Payable----------------Credit $36,613……. .....(2670 x 9.5+ 1480 x 7.60)